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Real Estate and Other Activities (Tables)
 6 Months Ended
Jun. 30, 2024
Real Estate [Abstract]  
Net Assets Acquired

We acquired or invested in the following net assets (in thousands):

 

 

 

For the Six Months
Ended June 30,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Land and land improvements

 

$

—

 

 

$

28,916

 

Buildings

 

 

—

 

 

 

114,966

 

Intangible lease assets — subject to amortization (weighted-average useful
   life of 24.8 years for 2023)

 

 

—

 

 

 

16,305

 

Investments in unconsolidated real estate joint ventures

 

 

107,908

 

 

 

—

 

Investments in unconsolidated operating entities

 

 

—

 

 

 

50,000

 

Other loans

 

 

—

 

 

 

25,000

 

Liabilities assumed

 

 

(2,290

)

 

 

—

 

 

 

$

105,618

 

 

$

235,187

 

Loans repaid(1)

 

 

—

 

 

 

(22,900

)

Total net assets acquired

 

$

105,618

 

 

$

212,287

 
(1)
The 2023 column includes a $23 million mortgage loan that was converted to fee simple ownership of one property as described under Lifepoint Transaction below.
Summary of Status on Current Development Projects

See table below for a status summary of our current development projects (in thousands):

 

Property

 

Commitment

 

 

Costs
Incurred as of
June 30, 2024

 

 

Estimated Rent
Commencement
Date

IMED Hospitales ("IMED") (Spain)

 

$

37,526

 

 

$

25,688

 

 

4Q 2024

IMED (Spain)

 

 

51,440

 

 

 

19,514

 

 

1Q 2026

 

 

$

88,966

 

 

$

45,202

 

 

 
Summary of Operating Results from Properties

The following represents the operating results from the five properties sold as part of the Utah Transaction and the five Prime properties sold in April 2024 (in thousands):

 

 

 

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenues(1)

 

$

7,092

 

 

$

(55,765

)

 

$

46,099

 

 

$

(12,567

)

Real estate depreciation and amortization(2)

 

 

—

 

 

 

(294,603

)

 

 

(6,381

)

 

 

(305,321

)

Property-related expenses

 

 

(9

)

 

 

98

 

 

 

(13

)

 

 

(22

)

Other income (expense)(3)

 

 

385,265

 

 

 

(25

)

 

 

385,223

 

 

 

(46

)

Income (expense) from real estate dispositions, net

 

$

392,348

 

 

$

(350,295

)

 

$

424,928

 

 

$

(317,956

)
(1)
The 2023 columns include an approximate $95 million write-off of straight-line rent receivables related to the hospital operations of the five Utah facilities that were acquired by CommonSpirit on May 1, 2023.
(2)
The 2023 columns include approximately $286 million of lease intangible amortization acceleration related to the hospital operations of the five Utah facilities that were acquired by CommonSpirit on May 1, 2023.
(3)
The 2024 columns include approximately $360 million of gains (net of approximately $20 million write-off of straight-line rent receivables) related to the Utah Transaction and $23 million of gains (net of $30 million write-off of straight-line rent receivables) related to the sale of five Prime properties.
Components of Total Investment in Financing Leases The components of our total investment in financing leases consisted of the following (in thousands):

 

 

 

As of June 30,
   2024

 

 

As of December 31,
   2023

 

Minimum lease payments receivable

 

$

601,406

 

 

$

611,669

 

Estimated unguaranteed residual values

 

 

203,818

 

 

 

203,818

 

Less: Unearned income and allowance for credit loss

 

 

(559,783

)

 

 

(571,059

)

Net investment in direct financing leases

 

 

245,441

 

 

 

244,428

 

Other financing leases (net of allowance for credit loss)

 

 

936,518

 

 

 

987,202

 

Total investment in financing leases

 

$

1,181,959

 

 

$

1,231,630

 
Summary of Investments in Unconsolidated Operating Entities

The following is a summary of our investments in unconsolidated real estate joint ventures by operator (amounts in thousands):

 

Operator

 

Ownership Percentage

As of June 30,
   2024

 

 

As of December 31,
   2023

 

MEDIAN

 

50%

$

461,662

 

 

$

471,336

 

Swiss Medical Network

 

70%

 

444,275

 

 

 

472,434

 

CommonSpirit (Utah partnership)

 

25%

 

106,407

 

 

 

—

 

Policlinico di Monza

 

50%

 

77,860

 

 

 

80,562

 

HM Hospitales

 

45%

 

53,027

 

 

 

56,071

 

Steward (Macquarie partnership)

 

50%

 

—

 

 

 

394,052

 

Total

 

 

$

1,143,231

 

 

$

1,474,455

 

The following is a summary of our investments in unconsolidated operating entities (amounts in thousands):

 

 

Operator

 

As of June 30,
   2024

 

 

As of December 31,
   2023

 

PHP Holdings

 

$

335,708

 

 

$

699,535

 

Swiss Medical Network

 

 

174,239

 

 

 

186,113

 

Aevis Victoria SA ("Aevis")

 

 

68,986

 

 

 

77,345

 

Priory

 

 

40,098

 

 

 

163,837

 

Aspris Children's Services ("Aspris")

 

 

15,968

 

 

 

15,986

 

Caremax

 

 

207

 

 

 

1,148

 

Steward (loan investment)

 

 

—

 

 

 

361,591

 

International joint venture

 

 

—

 

 

 

225,960

 

Steward (equity investment)

 

 

—

 

 

 

35,696

 

Lifepoint Behavioral

 

 

—

 

 

 

11,429

 

Total

 

$

635,206

 

 

$

1,778,640

 
Summary of Activity in Credit Loss reserves

The following table summarizes the activity in our credit loss reserves (in thousands):

 

 

 

For the Three Months
Ended June 30,

 

 

 

2024

 

 

2023

 

Balance at beginning of the period

 

$

456,592

 

 

$

121,972

 

Provision for credit loss, net

 

 

81,942

 

(1)

 

362

 

Expected credit loss reserve related to financial instruments
     sold, repaid, or satisfied

 

 

—

 

 

 

(35,229

)

Balance at end of the period

 

$

538,534

 

 

$

87,105

 

 

 

 

For the Six Months
Ended June 30,

 

 

 

2024

 

 

2023

 

Balance at beginning of the year

 

$

96,001

 

 

$

121,146

 

Provision for credit loss, net

 

 

442,533

 

(1)(2)

 

1,348

 

Expected credit loss reserve related to financial instruments
     sold, repaid, or satisfied

 

 

—

 

 

 

(35,389

)

Balance at end of the period

 

$

538,534

 

 

$

87,105

 
(1)
Reflects charges and reserves related to our investments in cash basis tenants recorded during the second quarter of 2024.
(2)
Reflects the charge related to the $362 million loan to Steward, as further described under "Steward Health Care System" subheading of this Note 3.
Schedule of Concentrations of Credit Risk See below for our concentration details (dollars in thousands):

Total Assets by Operator

 

 

 

As of June 30, 2024

 

 

As of December 31, 2023

 

Operators

 

Total Assets (1)

 

 

Percentage of
Total Assets

 

 

Total Assets (1)

 

 

Percentage of
Total Assets

 

Steward

 

$

2,826,852

 

 

 

17.5

%

 

$

3,518,537

 

 

 

19.2

%

Circle Health Ltd ("Circle")

 

 

2,077,416

 

 

 

12.8

%

 

 

2,119,392

 

 

 

11.6

%

Priory

 

 

1,260,359

 

 

 

7.8

%

 

 

1,391,005

 

 

 

7.6

%

Prospect

 

 

1,040,792

 

 

 

6.4

%

 

 

1,092,974

 

 

 

6.0

%

Lifepoint Behavioral

 

 

814,133

 

 

 

5.0

%

 

 

813,527

 

 

 

4.4

%

Other operators

 

 

6,112,813

 

 

 

37.8

%

 

 

7,352,012

 

 

 

40.2

%

Other assets

 

 

2,062,378

 

(2)

 

12.7

%

 

 

2,017,397

 

 

 

11.0

%

Total

 

$

16,194,743

 

 

 

100.0

%

 

$

18,304,844

 

 

 

100.0

%
(1)
Total assets by operator are generally comprised of real estate assets, mortgage loans, investments in unconsolidated real estate joint ventures, investments in unconsolidated operating entities, and other loans.
(2)
Includes our investment in PHP Holdings of approximately $340 million as part of the Prospect Transaction and tenant update described previously in this same Note 3.

 

Total Assets by U.S. State and Country (1)

 

 

As of June 30, 2024

 

 

As of December 31, 2023

 

U.S. States and Other Countries

 

Total Assets

 

 

Percentage of
Total Assets

 

 

Total Assets

 

 

Percentage of
Total Assets

 

Texas

 

$

1,472,182

 

 

 

9.1

%

 

$

1,891,482

 

 

 

10.3

%

Florida

 

 

1,296,622

 

 

 

8.0

%

 

 

1,348,210

 

 

 

7.4

%

California

 

 

1,062,797

 

 

 

6.6

%

 

 

1,252,674

 

 

 

6.8

%

Arizona

 

 

515,086

 

 

 

3.2

%

 

 

547,789

 

 

 

3.0

%

Pennsylvania

 

 

464,689

 

 

 

2.8

%

 

 

470,562

 

 

 

2.6

%

All other states

 

 

3,090,580

 

 

 

19.1

%

 

 

4,264,392

 

 

 

23.3

%

Other domestic assets

 

 

1,252,417

 

 

 

7.7

%

 

 

1,397,170

 

 

 

7.6

%

Total U.S.

 

$

9,154,373

 

 

 

56.5

%

 

$

11,172,279

 

 

 

61.0

%

United Kingdom

 

$

4,075,748

 

 

 

25.2

%

 

$

4,261,944

 

 

 

23.3

%

Germany

 

 

713,744

 

 

 

4.4

%

 

 

734,630

 

 

 

4.0

%

Switzerland

 

 

687,500

 

 

 

4.2

%

 

 

735,891

 

 

 

4.0

%

Spain

 

 

252,389

 

 

 

1.6

%

 

 

252,529

 

 

 

1.4

%

All other countries

 

 

501,028

 

 

 

3.1

%

 

 

527,344

 

 

 

2.9

%

Other international assets

 

 

809,961

 

 

 

5.0

%

 

 

620,227

 

 

 

3.4

%

Total international

 

$

7,040,370

 

 

 

43.5

%

 

$

7,132,565

 

 

 

39.0

%

Grand total

 

$

16,194,743

 

 

 

100.0

%

 

$

18,304,844

 

 

 

100.0

%

Total Assets by Facility Type (1)

 

 

As of June 30, 2024

 

 

As of December 31, 2023

 

Facility Types

 

Total Assets

 

 

Percentage of
Total Assets

 

 

Total Assets

 

 

Percentage of
Total Assets

 

General acute care hospitals

 

$

9,783,458

 

 

 

60.4

%

 

$

11,764,151

 

 

 

64.3

%

Behavioral health facilities

 

 

2,433,787

 

 

 

15.0

%

 

 

2,576,983

 

 

 

14.1

%

Post acute care facilities

 

 

1,689,844

 

 

 

10.5

%

 

 

1,716,248

 

 

 

9.4

%

Freestanding ER/urgent care facilities

 

 

225,276

 

 

 

1.4

%

 

 

230,065

 

 

 

1.2

%

Other assets

 

 

2,062,378

 

 

 

12.7

%

 

 

2,017,397

 

 

 

11.0

%

Total

 

$

16,194,743

 

 

 

100.0

%

 

$

18,304,844

 

 

 

100.0

%
(1)
For geographic and facility type concentration metrics in the tables above, we allocate our investments in operating entities pro rata based on the gross book value of the real estate. Such pro rata allocations are subject to change from period to period.